Credit card skimming and shimming represent a growing risk for businesses of every size. These threats target point-of-sale (POS) systems, ATMs, and payment terminals, enabling criminals to steal card data and cause costly financial harm to both businesses and customers. A successful attack can mean more than just immediate financial losses—businesses may face liability for fraudulent transactions, chargebacks, fines, and significant reputational damage. For business owners, understanding how these attacks work is essential to leveling up security and protecting hard-earned trust.
How Skimming Works
Skimming relies on devices surreptitiously attached to payment terminals. Overlay skimmers fit seamlessly over existing card slots, while internal skimmers are hidden inside devices, invisible to staff and customers. Wireless skimmers transmit stolen data via Bluetooth or other signals without the criminal needing to return to retrieve the device.
When a card is swiped or inserted into a compromised terminal, the skimmer reads and stores the magnetic stripe data, including sensitive details needed to clone cards or commit fraud. Often, keypads are overlaid or cameras are hidden nearby to capture PINs, giving criminals full access to accounts.
The Rise of Shimming: The Next Generation Threat
Unlike skimmers, shimmers are ultra-thin electronic devices inserted into card reader slots, targeting the microchip in EMV-enabled cards. Although chip cards are more secure due to encryption and dynamic authentication, shimming devices attempt to steal chip data to enable fraudulent transactions where chip verification is weak or fallback to magstripe data is allowed. These attacks are difficult to spot, as shimmers are lodged deep within the device and leave little physical trace.
Current Trends and Statistics
Recent data shows the risk is escalating rapidly:
- Skimming incidents have led to a 77% increase in compromised cards, even as EMV chip adoption grows.
- Skimmer attacks at bank-owned ATMs have shot up by 109%, a major shift from earlier trends focused on non-bank ATMs and gas pumps.
- Hotspots for skimming activity include states like Virginia, Texas, New Jersey, Florida, and Colorado.
The clear message? As criminals adapt, businesses must evolve their defenses.
Recognizing the Warning Signs
Staff vigilance is crucial. Employees are the first line of defense and well-trained teams can spot and stop many attacks before customer data is lost. Regular inspection protocols help businesses detect compromised terminals, prevent further data theft, and demonstrate commitment to customer safety. A single incident can undermine reputations built over years, making proactive recognition a non-negotiable best practice.
Visual Inspection Techniques
Train staff to examine card readers for:
- Loose, misaligned, or unusually bulky card slots
- Odd attachments, overlays, or mismatched components on the reader or keypad
- Signs of tampering such as scratches, glue, or tape residue around the terminal
- Keypads that feel spongy or raised compared to normal
Employees should compare card readers across multiple terminals—differences may point to malicious modifications.
Tech-Based Detection Methods
Integrate additional detection strategies:
- Use smartphones to scan for unknown Bluetooth devices near payment terminals, which may indicate the presence of a wireless skimmer.
- Deploy skimmer detection devices and apps designed to identify abnormal signals or the physical presence of additional circuitry.
- Apply and check tamper-evident seals, ensuring they are intact and have not been voided, especially on gas pumps or remote payment kiosks.
Protecting Your Business Payment Systems
A patchwork approach is not enough. Comprehensive payment security integrates hardware, software, process controls, and staff training, ensuring all entry points are covered and aligned with PCI DSS (Payment Card Industry Data Security Standard) compliance. Neglecting any layer increases vulnerability and potential liability.
Hardware Security Measures
Invest in tamper-resistant payment terminals that resist physical intrusion and automatically disable when breached. Secure payment devices to countertops and use locked mounts to deter removal or manipulation. Maintain an up-to-date inventory of all terminals, logging serial numbers and physical locations for rapid response if irregularities are found.
Transaction Monitoring and Fraud Detection
Implement advanced fraud detection powered by artificial intelligence and machine learning to analyze transaction patterns in real time and flag suspicious activity. Set up real-time alerts for unusual transactions—large purchases, out-of-area sales, or rapid-fire transactions on the same terminal. These controls allow for speedy intervention and limit exposure if a device is compromised.
Employee Training Best Practices
Make security training part of the onboarding process and require periodic refreshers. Cover current attack tactics, proper inspection protocols, and incident escalation procedures. Encourage staff to proactively question anything that seems amiss and to report issues immediately. A culture that values diligence over “hurrying up sales” will better protect customers and the business.
Modern Payment Technologies That Reduce Risk
Security is more than a compliance checkbox—it’s a business differentiator. Upgrading POS systems and payment technologies demonstrates a commitment to customer safety and can set a business apart from competitors. The right mix balances robust security, transaction speed, customer experience, and cost.
Contactless Payment Benefits
Contactless payment solutions—using NFC technology—significantly reduce skimming and shimming risks. Since customers never insert or swipe their cards, the opportunity for data interception vanishes. For businesses, implementing tap-to-pay can be as simple as upgrading terminals, with the added benefit of faster checkouts and improved hygiene.
Tokenization and Encryption
Tokenization replaces actual card data with single-use tokens, ensuring that even if intercepted, the information is useless to criminals. End-to-end encryption encrypts payment data the moment it enters the terminal until it reaches payment processors, further shielding sensitive information from theft. Together, these technologies create a robust payment security ecosystem.
Mobile Payment Solutions
Digital wallets like Apple Pay and Google Pay utilize device-level biometrics and tokenization, providing layers of protection beyond what traditional cards offer. Integration with current POS systems is increasingly straightforward, and customers increasingly expect these options at checkout. Expanding mobile payment acceptance meets market demand while adding meaningful security.
Responding to a Suspected Compromise
A well-crafted incident response plan is essential. Quick, methodical action can minimize the damage to customer trust, reduce financial exposure, and ensure regulatory and contractual obligations are met. Transparency and speed are key to an effective response.
Immediate Response Protocol
When you suspect a compromised terminal:
- Immediately take the affected device offline and secure it to prevent further tampering.
- Document the condition of the device with photos and detailed notes.
- Preserve all hardware and transaction records as potential evidence.
- Review recent transactions for unusual or unauthorized activity.
Customer Communication Strategies
Notify customers promptly, providing clear instructions on monitoring their accounts and what support your business will offer. Legal notification requirements vary by state and industry—consult with legal counsel to ensure compliance. Being honest and transparent about the incident helps rebuild trust and demonstrates accountability.
Working with Law Enforcement
Report the incident to local law enforcement and, when appropriate, the U.S. Secret Service or FBI cybercrime division. Provide preserved evidence, including the actual compromised terminal, security footage, and transaction logs. Cooperate fully with investigations and coordinate with your payment processor and acquiring bank to limit additional damage.
Building a Comprehensive Security Strategy
Payment security is a vital component of your overall cybersecurity posture. The threat landscape is constantly shifting—sophisticated attackers, new device vulnerabilities, and changing customer expectations demand ongoing vigilance and regular investment.
Risk Assessment for Payment Systems
Conduct a thorough evaluation of your current payment systems, documenting workflows, data access points, and existing security controls. Schedule regular audits and periodic penetration testing to uncover hidden vulnerabilities. Use these assessments to prioritize upgrades and staff training.
Security Technology Investment
Assess cost-effective options based on your business size and risk profile, from basic tamper-resistant terminals to comprehensive endpoint monitoring systems. Consider ROI not just in terms of loss prevention, but also customer confidence and reduced operational disruption after a security event. Phased rollouts enable upgrades without overwhelming business operations or budgets.
Creating a Culture of Security
Embed security as a core business value. Regularly reinforce awareness through training sessions, internal communications, and leadership support. Encourage employees to report suspicious activity by recognizing their efforts and establishing accountability for security at every organizational level.
Staying Ahead of Evolving Threats
Protecting your business from credit card skimming and shimming requires vigilance, investment, and a commitment to ongoing improvement. By combining robust payment hardware, smart detection technology, thorough employee training, and modern payment solutions, you not only reduce risk but also strengthen customer loyalty and brand reputation. Stay informed on emerging threats, review and refine your processes regularly, and work with trusted partners like I.T. Solutions of South Florida to ensure your payment security strategy is always one step ahead.
Ready to evaluate your business’s payment security or train your staff? Contact us today to learn how we can help you build a resilient, secure payment environment.
